Currently in the world, there is an ongoing crisis in the retail market, which has mostly started in the U.S. and has grown into other countries, caused primarily by the growth in e-commerce and changes in consumer shopping tendencies.
Global trends, e-commerce, and technology have played an important role in this crisis, as it has changed the role that shopping malls play in people's lives and how consumers do not visit shopping malls exclusively for shopping anymore, but in turn are looking for innovative and entertainment experiences that go well beyond traditional shopping. Increased urbanization and aging population has increased the need for public spaces to socialize and for gatherings, where shopping malls have not moved in the same direction in the past years. This is especially true given the growing association between consumption and enjoyment, which drives the need for more engaging shopping experiences.
Due at least in part to these trends, there are currently many facilities and buildings used for commercial and retail purposes (such as shopping malls or standalone big-box stores) that are either vacant, or are suffering from economic distress such that they may become vacant in the near term.
It has been estimated that one quarter of all shopping malls in the U.S. will shutter in the next five years (according to predictions by Credit Suisse). In many cases, such spaces are no longer offering what the public is looking for, like recreational and cultural activities, a gathering place to spend time with family and friends, additional amenities, and a setting to relax and improve physical and mental health. Not only is this impacting shopping malls that often have large anchor tenant stores within their complexes, but is also significantly impacting many standalone big-box stores that do not offer additional activities or amenities.
Given these new consumer trends and the increase of e-commerce, mall operators and owners have been forced to rethink how they conceive and operate their facilities. It has been estimated that there are more than 7,000 of these types of buildings in the U.S. (including shopping malls and big-box stores), based on the inventor's research, representing a good opportunity to upgrade their use and implement new and innovative concepts that allow generating revenue of such sites and adapt to such consumer's needs. This is especially true for the U.S. market, however it will also have considerable strength in other countries around the world.
Throughout this application, retail facilities will be separated into two types for clarity: A) Shopping malls with one or more big-box stores as their anchor, along with their associated parking space, and B) standalone big-box stores with their own parking space. Big-box stores are large spaces and buildings used for the commercialization and distribution of goods, generally for one specific type of market.
Retail facilities such as a A) shopping mall with at least one big-box store and associated parking, and B) standalone big-box stores along with their parking space, are typically located within a site that will be referred to as the “retail site” throughout this application.
Generally, standalone big-box complexes sizes typically range from 5 to 20 acres in size, including the store facilities and the parking lots that surround these stores (which are generally several times the size of the store itself). Some examples of big-box stores are Toys R Us®, Sears®, Barnes and Noble®, Staples®, Walmart®, Target®, Ikea®, Costco®, Macy's®, Sam's Club®, and Lowes®, among others. As noted above, in addition to e-commerce purchasing trends, these standalone big-box stores are also suffering from changes in customer tendencies. For example, consumers are now spending more on experiences such as travel, entertainment and food. As will be next described, these types of standalone stores have suffered greatly over the last several years, causing many of them to close.
One end result of the increase of e-commerce and changes in consumer tendencies, is the closure of many shopping malls and standalone big-box stores around the world. Examples of distressed stores that have closed over the last years, and that are planning massive closures, include several of the stores listed as examples above.
Therefore, there arises a need to utilize or “re-purpose” retail sites that are facing economic distress from poor sales and/or reduced visitors, or that are closing in the near term.
Some mall owners and operators have attempted to turn their complexes into lifestyle centers, which combine traditional shopping operations (or mixed-uses) with recreational and leisure amenities oriented towards upscale consumers. For example, these lifestyle centers are configured like strip shopping centers with an open-air design where storefronts oversee landscaped park-like areas (e.g., not parking lot areas—as in conventional strip shopping centers). A typical lifestyle center may include restaurants, street furniture, greenery, movie theaters, bowling centers and other entertainment centers, open spaces, and some even offer office space, medical facilities, temporary and non-temporary lodging facilities such as hotels and motels among others, and residential facilities.
However, there are currently no massive, disruptive, and repeatable solutions that can radically change how shopping malls or standalone big-box stores are configured, and how they are optimized for consumer experience.
Further, it is important to note that these two types of retail facilities have already undergone extensive approvals and permitting for high visitor density, by having previous performed environmental impact assessments as well as road impact assessments to ensure proper suitability for a large number of visitors. Thus, although these facilities are prepared to receive a large number of visitors and have accommodations, such as dedicated roads and ample designated parking space, when no solution is found to attract the visitors, then the space and permits are lost and/or are underutilized, along with the economic potential.